The billionaire entrepreneur talks to us about his very unsexy, but very important new project: How to make it affordable for property owners to retrofit their houses to make them more efficient.

Even people who don’t believe in climate change would probably acknowledge that improving the world’s energy efficiency makes sense. Using less power saves money and reduces pollution–and, in many cases, the investments are easy. Years of upgrades show that property owners usually make their money back within a few years.

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A report last year by Deutsche Bank Climate Change Advisors and the Rockefeller Foundation found that investing $279 billion in energy-efficiency retrofits across the country would produce a return of more than $1 trillion. The problem is unlocking the investment in the first place. What’s needed, the report said, is new types of finance models that knock down the initial barriers.

Energy-efficiency upgrades haven’t been taken up more widely because the property owner has had to bear the full burden.

According to Richard Branson, the British entrepreneur, that model is something called Property Assessed Clean Energy. PACE allows property owners to get funding for retrofits and not pay a cent upfront. They can put in energy-efficiency upgrades (or anti-hurricane measures and renewable energy systems) and then pay back the sum through their property tax bill over 20 years. The amount they save hopefully will be more than what they must pay over that time.

“Energy-efficiency upgrades haven’t been taken up more widely because the property owner has had to bear the full burden of upfront cost and associated financial risk,” Branson told Co.Exist in an email. “The PACE model turns all this upside down. By providing 100% financing, no upfront costs, and long-term, nonrecourse pay-back, it creates immediate financial incentives for property owners to upgrade their building today.”

Currently, 32 states and the District of Columbia have legislation allowing PACE financing for energy efficiency, with another five or six looking at it (the idea originated in California eight years ago, though other types of public projects have been financed this way for up to 40 years). Importantly, the agreement stays with the property, passing from one owner to the next. That means the owner can sell, and not get left with the upgrade cost before seeing any benefits.

The public benefit of not having buildings blow off their foundations is really high.

Branson is championing PACE through his environmental nonprofit, the Carbon War Room, which is helping to bring the financing together through a partnership with Ygrene Energy Fund. Ygrene strikes exclusive arrangements with municipalities to do energy-efficiency upgrade work in their area. It then markets the improvements to commercial and residential owners, and arranges short-term funding for the projects. Those loans are then bundled into a municipal bond, and sold on as low-risk investments. The government pays the money back through tax receipts.

Ygrene recently launched projects with the cities of Miami, Cutler Bay, Miami Shores, Palmetto Bay, Pinecrest, Coral Gables, and South Miami (its “Clean Energy Green Corridor”) to offer retrofits in those areas. Under Florida law, owners can also get financing for hurricane resilience (like tougher windows and water barriers), though the emphasis is on efficiency and renewables, like solar panels.

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“In Florida, the state is the insurer of last resort, so the public benefit of not having buildings blow off their foundations is really high,” says Stacey Lawson, Ygrene’s CEO. “For the owner, it allows them to reinvest the money in a way that doesn’t keep them out of pocket. It opens up a whole new vein of capital for them that is only related to energy efficiency.”

Ygrene is also working with Sacramento, California. In August, it agreed a $3.16 million retrofit of the city’s Metro Center Corporate Park–the biggest energy-efficiency deal to date. The investment, which will pay for things like a new building management system and better lighting, is expected to produce savings of $140,000 a year–which is a 27% decrease in costs for the owner, Metzler Real Estate. Lawson says rates between 25% and 30% are “very typical.”

PACE is not the only energy-efficiency financial fix. On-bill financing, in which owners and tenants repay through their utility bills, is also growing popularity. But PACE does seem to have momentum, particularly among commercial projects. Ygrene is only one of at least 10 funds using a similar model.

As usual, Branson has no doubt: “The implications of PACE for the scaled retrofitting of buildings across USA are huge, and couldn’t come at a better time for everyone–tenants, owners, financiers, and the planet.”

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About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.